Facebook Skeletons Keep Coming!

We talk one minute about bad PR and the next about skeletons in cupboards. When we discover one skeleton in a cupboard we deal with it and move on. When another is find another its only natural to raise more than an eyebrow.

Remember the millionaire brothers who rowed in this years Oxford Canbridge University Boat? Cameron Winklevoss, Tyler Winklevoss, together with Divya Narendra where co-founders of ConnectU, and took on their former Harvard classmate Mark Zuckerberg. They claimed that Zuckerberg the CEO of Socail Network Facebook had taken their software code and business plan. In 2008 they settled out of court for some $65 million in Facebook stock and cash. The dispute still rages on over the company valuation and some would suggest that there is there is no smoke without fire.

Now Mark Zuckerberg have had another potential skeleton in New York web designer Paul Ceglia. Ceglia has filed suit against Facebook and company CEO, claiming an April 2003 contract which would now entitle him to around 84% ownership stake in Facebook. The case is over a 7 year old contract signed by Zuckerberg and Ceglia, the designer. The contract is claimed to pay Ceglia some $1,000 and a 50% stake in the site. When it was nothing the 50% was worth nothing but today that could be substantial. The lawsuit also claims that Ceglia is entitled to "an additional 1% interest in the business for every day after Jan. 1, 2004, until it was completed." The terms apparently state, "It is agreed that Purchaser [Ceglia] will own a half interest (50%) in the software, programming language, and business interests derived from the expansion of the service to a larger audience."

Ceglia seeks a declaratory judgment and relief in the form of monetary damages and 84% ownership -- worth between $5.6 billion and $9.24 billion, which is based on Facebook's estimated value of between $6.5 billion and $11 billion.

Social Networks Grow

Social network sites are clearly the in thing and are developing in many ways. Today we read that News Corporation is set to launch a mobile phone version of MySpace. The service will be advert supported free and enable users to transfer messages, comments and update blogs.

Separately, in that other social world of Facebook we hear of potential investors ready to table $300 to $500milion for just 5% of the company! That will give the company a valuation of potentially around $10 billion! Last September, Yahoo offered $900 million in order to acquire Facebook. An offer rejected by Mark Zuckerberg,(pictured) its 23-year-old chief executive Zuckerburg. Today Facebook has more than 40 million members, up from 9 million last year.

This time the investors are no other than Microsoft and Google. Facebook’s valuation could go even higher if the two rivals create a competitive bidding war. It is also rumoured that Facebook is seeking a minimum valuation of $10 billion but it go as high as $13 billion. Not bad for a company which Richard Greenfield, a Pali Research analyst, earlier this year, estimated generated revenues between $60 million to $96 million, with no real profit. Much of that revenue comes from a year-old advertising relationship with Microsoft.